GML owns 92% of the issued shares in Explorer Ltd. The remaining 8% of the shares are held by five individuals, including a Mr Owen who owns 0.5% of the issued shares. Mr Owen is a high profile individual who has, at times, been critical of the Chinese government’s activities in the South China Sea. GML is concerned that its ongoing association (through Explorer) with Mr Owen may harm its relationship with its Chinese customers. At a meeting of Explorer, a resolution is passed amending the constitution of Explorer, to allow any member who is entitled to at least 90% of the issued shares of Explorer to acquire compulsorily, the shares of any other member at a price of $20.00 per share. Explorer shares have recently been valued by an independent expert at $15.78. Mr Owen does not attend this meeting and the majority shareholder (GML) does not vote. The resolution is passed unanimously by the four other minority shareholders. Mr Owen is challenging the validity of the amendment. Having regard to the decision in Gambotto, will his challenge succeed?
Rule/Law: Equitable limitation on majority voting power. Explain in your own words.
Application of law: Is the removal of Mr Owens convenient or necessary? Price?
Conclusion: Reasonable conclusion
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